The archive · Developer & Business Tools · Strategic decision · 2009–2014
Docker bets open-source containers replace VMs; Greylock leads $15M Series B
DotCloud's pivot to Docker bet open-source containers that move only code would beat VMs; Red Hat, Google, eBay adopted it before a $15M Greylock-led Series B.
Docker
What the business is
Docker (formerly DotCloud) offers Docker, a free open-source Linux container platform that packages an app with its dependencies so developers can move code between clouds without moving or booting a virtual machine; by January 2014 it was raising capital to build paid commercial services around that open core.
How it started
Solomon Hykes originally launched the company as DotCloud in 2009: a platform-as-a-service that deployed apps across multiple programming languages. Competition from Heroku and VMware's Cloud Foundry made that market brutal, and broad acceptance of PaaS never materialized. The underlying need was real, though — developers wanted a lightweight way to move code to cloud services without the tax of virtual machines that were hard to move and required manual integration. Hykes launched Docker as an open-source project in spring 2013, and by September Red Hat had agreed to integrate it into OpenShift, a partnership TechCrunch framed as proof the pivot worked.
What happened
On 2014-01-21 the company announced a $15 million Series B led by Greylock Partners — general partner Jerry Chen's first investment since joining the firm in August — with minority participation from Insight Venture Partners, existing investors Benchmark Capital and Trinity Ventures, and Yahoo co-founder Jerry Yang. The funding was earmarked for pushing Docker toward general availability, developing commercial services to pair with the open-source technology, and building a team to support the community. Docker then had more than 9,000 GitHub stars and 1,320 forks, was one of the world's fastest-growing open-source efforts, had been adopted by Google Compute Engine, and ran in production at eBay and Yandex. Trinity's Dan Scholnick said he had never seen a technology take off as quickly or with such broad-based adoption.
How it ended up
As reported on 2014-01-21 the bet had validated early but was unfinished: Docker had closed a $15M Series B and was scaling, with commercial monetization still to be built around the open-source core.
Background
Docker is a lightweight, open-source "container" technology designed for developers to quickly move code to the cloud: the container sits above the operating system, so the only thing that moves is code — no virtual machine to boot or configure. The company behind it was born in 2009 as DotCloud, a multi-language platform-as-a-service, and pivoted after that market turned hostile; by January 2014 it had raised a $15 million Series B led by Greylock Partners.
Solomon Hykes launched Docker as an open-source project in spring 2013, after DotCloud's PaaS ran into competition from Heroku and VMware's Cloud Foundry. Virtualization, in Hykes's framing, virtualized the server rather than the app: the whole operating system had to move, boot and configure wherever the application went. Docker packages the app and its stack into a Linux container that syncs with the cloud service — and the company bet developers would adopt that as the standard way to ship software, monetized later through services rather than PaaS fees.
By the 2014-01-21 funding announcement the bet had early proof: more than 9,000 GitHub stars and 1,320 forks made Docker one of the fastest-growing open-source efforts; Red Hat was integrating it into OpenShift; Google Compute Engine had adopted it; eBay and Yandex ran it in production. Greylock's Jerry Chen — his first investment since joining the firm — cited VMware's lesson of being "as frictionless as possible," and Trinity's Dan Scholnick said he had never seen a technology take off so quickly. The money funded general availability and commercial services around the open core.
What has to be true
- The PaaS route meant fighting Heroku and Cloud Foundry in a market developers had not embraced; the pivot reframed DotCloud from another PaaS into the portability layer beneath every cloud.
- Docker removed the tax of virtualization: because the container sits above the OS, only code moves, with no operating system to boot, configure or manually integrate.
- Open sourcing Docker made adoption viral without a sales force: 9,000+ GitHub stars, Red Hat, Google Compute Engine and eBay/Yandex production use arrived within ten months of the spring 2013 launch.
- Investors read the VMware lesson — win by being frictionless — and funded a core nobody paid for yet, betting the commercial value would come from services around the platform, not from the code.
What can be applied
Make the core open and frictionless, let the developer community pull enterprises in, then monetize the platform's centrality with services later — the code is the wedge, not the product.
Aftermath
As of 2014-01-21 Docker had just closed a $15M Series B led by Greylock, with Insight Venture Partners, Benchmark Capital, Trinity Ventures and Jerry Yang participating. The money was earmarked for moving Docker toward general availability, building commercial services around the open-source technology, and supporting a community that already exceeded 9,000 GitHub stars and 1,320 forks. Red Hat was integrating Docker into OpenShift, Google Compute Engine had adopted it, and eBay and Yandex ran it in production; the material records no later milestones, so the case stops at the funding event.
Sources
- Docker Raises $15M For Its Open-Source Platform That Helps Developers Build Apps In The Cloud
- DotCloud Pivots And Wins Big With Docker, The Cloud Service Now Part Of Red Hat OpenShift
- Docker Raises $15M For Its Open-Source Platform That Helps Developers Build Apps In The Cloud
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